Mumbai: Tractor-maker International Tractors (ITL) that sells the Sonalika brand, is in talks with private equity players to sell 10% stake for around Rs 450 crore.
“The fund will be used to fuel production capacity and acquire an overseas company. We are in talks with a couple of private equity funds and will reach a final agreement soon,” Sonalika Group chairman, LD Mittal, told PTI.
ITL has installed capacity of 60,000 tractors a year. “We want to scale it up to 1 lakh, within two years,” he said.
Sonalika Group’s International Tractors Ltd. (ITL) plant in Hoshiarpur, Punjab.Photo by Bloomberg.
The Punjab-based tractor maker, one of the top three domestic players, is looking to acquire a tractor firm for Rs 200 crore, in Europe. “The deal is almost finalised,” Mittal said, adding that acquisition will happen after divesting 10% of promoters’ holding in ITL.
ITL is a part of the Rs 5,000-crore Sonalika Group. It manufacturers a wide range of 20 HP to 90 HP category of tractors.
The company is eyeing 12% market share from present 10% in the domestic market. It sold 45,000 units last year and plans to sell 50,000 this fiscal.
It clocked Rs 2,000 crore revenue last fiscal and is eyeing Rs 2,500 crore revenue this fiscal, Mittal said.
The company plans to set up a manufacturing facility in the south, and has investment plan of Rs 100 crore next year.
“We want to increase our sales in the south. The new facility will cater to the southern markets,” he said.
The company has proposed to set up the new tractor facility on a 25-acre land with an installed annual capacity of 30,000 tractors.